The damning report found 'very high' evidence of racism in all of the state's Local Health Networks (LHNs), except the Women's and Children's network which was ranked as 'moderate'.

The Eyre and Far North Local Health Network (EFNLHN), which covers all of Eyre Peninsula and towns such as Coober Pedy and Oodnadatta, was placed in the very high category.

The issue is particularly relevant in Ceduna, where 22.4 per cent of the town's population are Aboriginal or Torres Strait Islander, In Coober Pedy the percentage is 18.1 per cent and in Port Lincoln 5.1 per cent.

The report issued by the HPC stated the audit was initiated after recommendations to improve health outcomes for Aboriginal and Torres Strait Islander people were, according to the Labor Party, ignored by the Health Minister in 2018.

"In the Government's formal response [of mid-2019] ... SA Health made no comment on several of our items of Ministerial advice..." claims the report.

"We inferred from the lack of comments that these components of our Ministerial advice had not been agreed by SA Health on behalf of the Government."

Those recommendations included workplace audits to identify racism and discrimination and increased Aboriginal representation across health leadership.

Shadow Aboriginal Affairs Minister Kyam Maher said it was "inexcusable" for a modern health system to be plagued with institutional racism.

"How can the government expect to improve health outcomes for Aboriginal people if the systems meant to treat and support them are inherently racist?" he said.

"The Marshall Liberal Government must explain why they ignored the recommendations they were directly presented almost two years ago, and commit to immediately acting upon the recommendations they've been given today.

"This audit yet again shows why the Liberal Government needs to appoint an actual Minister for Aboriginal Affairs who has the time and willingness to stand up for Aboriginal people."

SA Health published a response to the report in which it noted "the seriousness of this conclusion and will consider the recommendations of the Health Performance Council to inform an appropriate response".

However, SA Health also claimed the council had "not considered the full breadth of the activities and responses within Local Health Networks' by relying on 'published information only'".

"Considering the Local Health Networks in isolation from broader health system and state-government strategy and policy produces a significant gap in the Health Performance Council's analysis," they said.

EFNLHN chief executive officer Verity Paterson said in a bulletin to staff the network said "no to all forms of racism" and that it was committed to improving health outcomes in collaboration with Aboriginal communities and leaders.

"That report was researched early in our LHN's journey, before the LHN had completed a strategic plan, reconciliation action plan or annual report," she said.

"We have made a start - we have a director of Aboriginal health who is a member of the executive team; we are developing an LHN-specific reconciliation action plan; we work in partnership with Aboriginal Community Controlled Health Organisations (ACCHO) to ensure that services are accessible and provide significant funding to ACCHO and other Aboriginal organisations to support the improvement of health outcomes; and deliver a range of services targeted at Aboriginal consumers including primary health care, Aboriginal Family Birthing and Trachoma Elimination programs.

"Our governing board has approved a consumer and community engagement strategy, which has a strong Aboriginal consumer engagement focus."

She said the LHN was committed to increasing the proportion of Aboriginal staff in the workforce, while cultural awareness training is compulsory for staff, plus new policies and service initiatives are subject to Aboriginal impact statements.

"There is much more to do and we will be guided by Aboriginal communities and leaders as we seek to eradicate institutional racism of any kind at our LHN," she said.

In a communique to SA Health staff, Department for Health chief executive Dr Chris McGowan said there was "no place for racism in our organisation".

"However I would also like acknowledge the vast strides that the LHNs and the department have made in recent years towards addressing the inequities faced by Aboriginal people," he said.

Health Minister Stephen Wade said the government was working to improve its health services.

"Our hospital networks are implementing a range of positive initiatives to promote cultural change and all their boards have at least one member with expertise, knowledge or experience in relation to Aboriginal health," he said.